Opposition and community speakers said the departure last week of James Kelaher, the taskforce head, suggested the $1 billion scheme should be dumped.

The PM last month announced plans to introduce the card to replace 17 health and welfare cards from 2008, while funding for the roll-out is expected to be one of the big items in tonight's Federal Budget.

"I am confident that there will be appropriate safeguards balanced against the evident advantages in protecting the revenue and ease of transactions that the card will bring," Howard said yesterday.

Human Services Minister Joe Hockey has been given the job of implementing the card. But the project shows signs of degenerating into an old-fashioned turf war when it comes to financial control of the billions required and control of its security and privacy.

Kelaher accused the Department of Human Services and Hockey of trying to contain the card, its funding and power within their empire.

Departmental bureaucrats took over the project while Kelaher (the former MD of Medicare) and Hockey were overseas, according to a Financial Review report.

Kelaher recommended that funding for the Health Card (as the DHS has taken to calling it) be taken outside the department and that an external advisory board keep privacy issues in check.

Labor's human services spokesman, Kelvin Thompson, says he fears a cost blow-out in the project and has concerns about the security of the data.

"This government has a poor track record when it comes to the implementation of major projects," Thompson added. "It has a sorry history of cost blow-outs in large IT projects.

"It's asking taxpayers to buy a pig in a poke here without giving us anything in the way of details. Kelaher's resignation can only make the public increasingly uneasy."

Despite promises by Howard, fears over its control have already caused a backlash of opposition. This could become strong enough to sink the project, if independent security and privacy safeguards are abandoned.